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Punished for stoozing?

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  • ALIBOBSY
    ALIBOBSY Posts: 4,527 Forumite
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    GingerBob wrote: »
    And where do they get their money from? It's the investors' money, not theirs. I suppose it becomes theirs when they borrow it from the investors, like the money becomes yours when you borrow it from Halifax.

    Yep investers and savers as soon as they put money in the bank it legally becomes the banks and the investers/savers become
    creditors of the bank. In the unlikely (but not impossible) position that a bank went to the wall the ordinary savers would be bottom of the list creditors though behind most of the bigger investers.

    Ali x
    "Overthinking every little thing
    Acknowledge the bell you cant unring"

  • GingerBob_3
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    Cash withdrawals on credit cards are seen as high risk - people only do this as a last resort. If you had out through a few other transactions you would most likely have been fine.

    Yes and no. Yes, they are seen as high risk, but it's not always the case that people do it as a last resort. I used to have an AMEX card, used exclusively for employment expenses, and I often took out substantial amounts of cash, usually for foreign travel. Card was always paid off each month, but then AMEX, in their "wisdom" decided to reduce the credit limit to an unusable amount and withdrew the cash facility. A bunch of idiots. Of course I stopped using the card immediately and have now kicked them into touch completely. They lost a good customer. They have a brilliant business model; not.
  • MisterBaxter
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    GingerBob wrote: »
    Yes and no. Yes, they are seen as high risk, but it's not always the case that people do it as a last resort. I used to have an AMEX card, used exclusively for employment expenses, and I often took out substantial amounts of cash, usually for foreign travel. Card was always paid off each month, but then AMEX, in their "wisdom" decided to reduce the credit limit to an unusable amount and withdrew the cash facility. A bunch of idiots. Of course I stopped using the card immediately and have now kicked them into touch completely. They lost a good customer. They have a brilliant business model; not.

    They may have lost a good customer but not necessarily a profitable customer. Credit Card companies want and need those customers who pay what they owe on time whilst at the same time paying some interest; this is only going to become more of an issue when the EU transaction fee caps kick in.
  • blenz101
    blenz101 Posts: 42 Forumite
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    GingerBob wrote: »
    I used to have an AMEX card, used exclusively for employment expenses, and I often took out substantial amounts of cash, usually for foreign travel.
    [SNIP....]
    They have a brilliant business model; not.

    Although this is taking this thread even more off topic it most certainly not Amex's business model to encourage the use of cash withdrawals.

    Their model operates on attracting premium customers who in turn make high value spends through their card in order to generate merchant fees, this is supported by annual fees charged directly to the member. In return card holders are rewarded with points which can be used in a variety of loyalty schemes - the points encourage the spend, they don't do offers around interest rates. Threaten to leave and you would be offered more/double points, not lower interest or a balance transfer.

    Most Amex card holders will find they have a relatively low cash withdrawal limit, it often needs to be specifically activated (fast cash?) and the fees are designed to be prohibitive, earn no rewards and attract punitive interest.

    They can't distinguish what you are going on to use the cash for once it has been withdrawn so you would appear as as high risk to their algorithms as anyone else who can't budget their liquidity month to month.

    Amex do have card products suitable for foreign business travel but using a GBP£ denominated credit card in this way for cash withdrawals will have been why you were stopped.

    I'm sure you pretty much knew this but I didn't think it was fair to criticise a card issuer and their whole business model because you attempted to use it in a way that was totally at odds with a normal customer risk profile.
  • Kendall80
    Kendall80 Posts: 965 Forumite
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    I was recently sent a letter increasing my credit limit on a certain card. I responded asking for an increase in the 0% period instead. All seems to have gone quiet now but t'was worth a try :)
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